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Judge recommends jail time for man who used the Americans With Disabilities Act to extort money from businesses

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COLORADO SPRINGS -

Terrell Frederick used the Americans with Disabilities Act to make money and now he, his attorney and third-party law firm are in trouble. 

In 2017, News 5 Investigates uncovered an elaborate scheme to extort money from local business owners. 

One case went to federal court and in a bombshell ruling, the magistrate judge has recommend possible jail time for the plaintiffs. 

Over a two-week time period, Frederick filed 43 nearly identical lawsuits against Colorado Springs businesses, alleging they weren't complying with the Americans with Disabilities Act. 

In several cases filed, Frederick claimed the business discriminated against him and his family because the doors took more than 5 lbs. of force to open, but the cyclist with no known disability had no issue opening his apartment door and then shutting it in Chief Investigative Reporter Eric Ross' face after he started asking questions. 

Ross asked, "Can we talk to you about the lawsuits you filed," 

"No," Frederick said. 

News 5 has given Frederick numerous opportunities to explain his motive behind filing 43 cases, but he has refused. 

"This is a scam," attorney Bruce Wright said. 

7 days after suing Panda Express, Frederick's attorney sent a letter demanding the Chinese food chain pay $2,750 to drop the lawsuit. 

In multiple cases News 5 Investigates reviewed, Frederick and his attorney would file lawsuits and then demand thousands of dollars to settle without ever asking for the business to correct the alleged violation, if one existed. 

"If they got a quick settlement---$3,000 or $5,000 which would be less than it would cost the business to hire a lawyer, they got their money," Wright said. "If a lawyer appeared and actually started defending the case, they would just move to dismiss the case and walk way. What that tells me is they weren't after enforcing ADA violations. It was just about the money." 

Wright says in at least two-thirds of the cases Frederick filed, the business owners fell into the trap and paid the money. 

Why is it a trap? 

Under the law, a monetary award cannot be issued from an ADA lawsuit. A judge can only order the alleged violation be fixed. Attorneys behind these cases know that and bank on getting businesses to settle. 

"These are not ADA advocates," Congressman Ted Poe (R-Texas) said. "They are advocates for making money off the ADA. The individuals are sometimes not disabled themselves." 

Poe has drafted federal legislation to close what he calls a loophole in the law that is allowing anyone to file these lawsuits against businesses for ADA violations which may or may not exist. 

H.R. 620 has already passed the House and if approved, the bill would require anyone filing an ADA-related lawsuit to give the business owner notice of the violation first and then time to correct it.

"The law is being abused by unscrupulous individuals, plaintiffs and their attorney who are making money off the disabled and it is shameful and we want to stop that," Poe said in an interview earlier this year with News 5. 

It's unclear whether Frederick actually visited all the of the businesses he sued because he failed to provide documentation and evidence the court requested.

A deposition transcript obtained by News 5 Investigates paints a clear picture of how the scene went down:  

For every case Frederick filed, he would get paid $50. His attorney, Jeff Emberton, would get $100. The money from the settlement agreements which ranged from $2,500 to $7,500 went to a law firm called Litigation Management Services, or LitMan. 

"I think it's safe to say certainly for lawyers who signed up for this scheme, they aren't rocket scientists," Wright said. "Any lawyer who would let somebody else use his law license and sign his name to pleadings that he is responsible for, for $100 a case in my opinion deserves to have his license revoked." 

When it came time for court, Frederick and his attorney violated Magistrate Judge Kathleen Tafoya's orders to provide documentation to prove their case.

Litman also ignored a subpena to produce documentation to validate the alleged ADA violations at Panda Express on Powers in Colorado Springs.  

Tafoya said the plaintiff and his counsel disobeyed court orders and wasted resources. She ordered the plaintiff to pay for Panda Express' attorney's fees and even took things a step farther, recommending a U.S. District Court judge hold Frederick, Emberton and LitMan in contempt of court. 

Here is a copy of the order: 

Emberton could eventually lose his license and Magistrate Judge Tafoya also recommended the court consider banning any future lawsuits from Litman without prior approval. 

A contempt of court charge could eventually lead to jail time. 

"Careful consideration of the matter leads to the conclusion that incarceration, rather than a fine, is the appropriate coercive remedy in the case at bar," Judge Tafoya said. 

News 5 reached out to attorney Jeff Emberton and Litigation Management Services for comment. Neither has responded. 

You can read our original report on this specific case by clicking here

If you have a problem or issue you'd like the News 5 Investigates team to look into, send an email to News5Investigates@koaa.com or call our tip line at 719-228-6275.

Previous news coverage: 

March 2017: Local businesses hit by a wave of ADA lawsuits

March 2017: Woman who filed dozens of controversial ADA lawsuits resigns from disabilities board

March 2017: Is your parking lot ADA compliant? Here's how to avoid litigation

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